Determining Significant Risks in the Variability between Design-Stage Elemental Cost Plan and Final Tender Sum: Fid-Bau Portal

Determining Significant Risks in the Variability between Design-Stage Elemental Cost Plan and Final Tender Sum

Adafin, Johnson

AbstractSeveral researches have indicated that pre-tender estimating inaccuracies are significantly influenced by the level of risk information available to estimators. This study first identifies risk factors that influence variability between design-stage elemental cost plan and final tender sum (contract sum) in traditionally procured commercial building projects. It further evaluates the identified risk factors through risk measurement to determine the most significant ones during design development. Project data from New Zealand were obtained through online questionnaire and interview surveys to determine the construction consultants’ perspectives. Responses to the survey were analyzed by using descriptive statistics, risk mean analysis (RMA), degree of risk, coefficient of variation, and Kendall’s coefficient of concordance. A ranking of mean scores of the survey responses enabled the most significant risk factors to be determined. Interviews were analyzed by using thematic and documentary methods to complement survey responses on risk identification. Thus, interview survey prioritized five from the top 10 risk factors obtained by using quantitative approach. The primary contribution of this study is to provide quantitative confirmation of the more general statements made in the literature from around the world and therefore add to and consolidate existing knowledge. Moreover, as risk elements are inherent in construction project developments globally, these findings have important ramifications for all construction projects in expanding and clarifying existing knowledge on what is needed for reasonable budgetary performance and successful delivery of construction projects.